The tutorial explains exactly what a skin is made up from, and how to edit to create your own.

You will almost certainly need a graphics tool. MS Paint will do at a pinch, but you're better off getting something nicer. Paint Shop Pro is a good tool. It's cheaper than some options and pretty good for the price. Also 4.x is available free (legally) on the web if you can track it down (7.0 is in beta!).

PSP can be easier to learn than Adobe Photoshop is considered a better tool. But it costs a lot more.

Finally after editing your skin you'll want to turn it into a .wsz file to submit to skin archives. To do this follow these instructions:.wsz

One point not covered on the above page is HOW to change the extension. This is a task for a skilled windows user. You should be able to figure it out if you've got this far. If you really are that thick:

View->Options in Windows Explorer (Based on the IE4 upgrade) And uncheck the box marked: Hide File Extentensions for Known Types. This will then include the .zip extension for your files so you can see what they are. Your skin name will be listed in Windows Explorer as: "skinname.zip" now, previously it may have been merely "skinname". Right click on the file and select "rename" carefully delete the charcters "zip" and replace with "wsz". Hit enter to complete! If you make a mistake typing, press the "Escape" key to cancel the rename.